HONOLULU (AP) The biggest shipping company serving Hawaii is reporting net income of more than $7 million for the quarter ended December.

Matson Navigation Co. said Tuesday the earnings include a charge of nearly $10 million to settle a lawsuit.

Matson CEO Matt Cox said in a conference call the case is related to allegations that certain Matson freight forwarder customers had improperly billed the Defense Department for shipping military household goods.

Cox says the allegations lack merit, but the time and costs of litigation and the risks of a jury trial convinced the company to settle.

Matson says it's not clear how much last September's molasses spill in Honolulu Harbor will affect future earnings. It says it's unable to estimate the future costs, penalties, damages or expenses related to the incident.